Elon Musk’s AI startup, xAI, is reportedly trying to borrow a staggering $12 billion to lease more Nvidia GPUs, a move that any PC gamer who’s ever gone on a hardware binge might kinda relate to. According to The Wall Street Journal, xAI is in talks with private equity firms to secure this massive capital injection just weeks after raising an estimated $10 billion through stock sales and debt.
The investment firm Valor Equity Partners, which is believed to have close ties to Musk, is reportedly negotiating with lenders to facilitate this transaction. It’s wild to think about, but even though Musk might be the world’s richest man, he’s decided not to hitch xAI’s AI training to a cloud provider like OpenAI or Anthropic did. Instead, xAI plans to build and run its own infrastructure, which, obviously, costs a substantial amount of money.
SpaceX is reportedly investing $2 billion in xAI, a process similar to transferring money between accounts, but on a much larger scale. Instead of buying flip flops for a beach trip, though, they’re preparing to hoard a massive amount of high-end AI hardware. I wonder how many gaming PCs could be powered by that kind of GPU?
Currently, xAI’s supercomputer, Colossus, reportedly utilizes approximately 200,000 Nvidia H100 GPUs, consuming between 50 and 150 megawatts of power. That’s enough electricity to power a small city, and the data center even uses methane-burning gas turbines to supplement its power needs, which has stirred some environmental concerns.
Colossus was initially built with 100,000 GPUs in just 122 days and then expanded to double that in another 92 days. Nvidia CEO Jensen Huang called it a “superhuman” feat, saying that Elon Musk is essentially the only person who could pull off such a massive engineering and resource-marshalling task.
Now, with this new loan, xAI plans to add an even larger number of Nvidia GPUs to its arsenal. Will they need to start setting up tents to house all this gear, like Meta reportedly had to do? I’ve got an old marquee in storage that Musk can borrow, but I can’t guarantee how careful the previous owner was.
We’re smack in the middle of a colossal AI hardware arms race, and Musk’s xAI looks determined not to fall behind. Whether all those GPUs will arrive in time or if we’ll see a new kind of data center pop up is anyone’s guess.
